The percent of sales method is the only method allowed by GAAP to estimate the amount of uncollectible accounts.

Name: The percent of sales method is the only method allowed by GAAP to estimate the amount of uncollectible accounts.
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Question

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While the percent of sales method is commonly used to estimate uncollectible accounts, GAAP also allows for other methods such as the aging of accounts receivable method.

The Percent of Sales Method Is the Only Method Allowed